§ Ms LynneTo ask the Secretary of State for Social Security what would be the(a) gross and (b) net cost in each year from 1997 to 2002 of uprating state pensions by (i) the retail prices index and (ii) earnings in these years on the basis of current estimates. [30153]
§ Mr. HealdThe information is in the table:
The estimates are for uprating basic state retirement pension, additional pension and graduated retirement benefit. The calculations are based on assumptions of annual retail prices index and Rossi index—RPI less most housing costs—increases of 2.5 per cent. and annual earnings increases of 4 per cent. As RPI and Rossi are assumed to increase at the same rate, there is no net cost figure for price uprating.
Total state pension benefit expenditure £ million cash prices Gross cost of price uprating Gross cost of uprating by earnings Net cost of earnings uprating 1997–98 840 1,350 1,220 1998–99 1,740 2,820 2,530 1999–00 2,680 4,380 3,920 2000–01 3,650 6,010 5,370 2001–02 4,660 7,730 6,900 2002–03 5,700 9,530 8,500 Source:
Government Actuary's Department estimates of annual expenditure on basic state pension and assumptions of annual increases in RPI, Rossi and earnings.
Notes:
1. Costs are calculated using 1996–97 rates as a baseline, eg; the cost quoted for 2002–03 is the cost of uprating by the relevant method, in that year, from 1996–97.
2. Uprating by higher of earnings or prices only applied to basic retirement pension.